The harvest of the week.

Job growth in the U.S. sends stocks down as the Non-Farm payrolls figures come better than expected, with a reading of of 263K vs 248K forecast, in addition to unemployment rate decreasing to 3.5% vs 3.7%, reflecting a solid labour market and an even stronger U.S. economy. 

Markets quickly digested the news with the USD regaining back its strength to trend back near levels of 112, up from its 110 lows of the week. Global stock markets were unable to catch a breather despite a soft rebound this week. The Dow Jones has also risen up from its bearish territory, showing signs of resilience despite recession concerns still fuelling more fears in the market. 

The good economic figures are also supported by the latest ADP employment change which also came above expectations. The figures which align with the Feds aggressive tightening, will definitely be a catalyst to support more hefty rate hikes till end of year. Several Fed members have signalled the chances of 125 basis points till end of year which in turn will take a toll on the market’s performance in the next period, while I reckon it could reach to 150 basis points before the year wraps up.

From a technical perspective, the USD can swing to 120 highs, as previously hit in 2001 in the dot-com bubble, ultimately weakening alternative assets. The ultra-hawkish Fed has officially declared a currency war, forcing other central banks such as the Bank of Japan or the People’s bank of China, to intervene and alter their monetary policies to stabilize their own currencies against such a strong U.S. dollar, by selling their USD reserves. Which is why we saw a mild correction on the USD this week. 

With geopolitical tensions rising, along with the energy crisis and peaking inflation, the reserve currency war is bound to be more problematic for investors, as we saw with the GBP and the Bank of England surprise of buying 30 year bonds, causing a sudden rebound for the GBP after hitting an all time low. Investors should monitor there open positions as we are likely to see more volatility as other central banks could possibly place more interventions in the next period as their currencies become to more vulnerable to stronger USD.

From the energy perspective, OPEC+ surprises markets with a hefty production cut by 2 million barrels per day, that puts inflation at the forefront against global economic growth. Oil prices were one of the winners of this week, as the cut sent oil prices back to the upside direction on the basis of limited supply. 

Read this next

Institutional FX

Verto launches EM FX marketplace: NGN, ZAR, XAF, XOF, KES, GHS, UGX

“We’ve seen significant pent-up demand looking for counterparties, which is one of the reasons we’re launching this product. We built Verto Marketplace to directly address these systemic issues, offering a platform that provides the control, transparency, and cost-efficiency that traders, brokers, and corporate treasurers need.”

Payments

BVNK launches Swift payments to move between fiat and stablecoins

“Adding USD and EUR via Swift means that our customers can really take full advantage of stablecoins to speed up their money movement, wherever they are based – and they can easily get back into fiat currencies if and where they need to.”

Market News

Base metals could soon take off from the base again

Dive into our full analysis to understand the potential resurgence of base metals and what it could mean for your investment strategy.

Digital Assets

Global clamp down on crypto tax evasion to go live in 2027

“As jurisdictions that play host to active crypto markets, we therefore intend to work towards swiftly transposing the CARF into domestic law and activating exchange agreements in time for exchanges to commence by 2027.”

Digital Assets

Ripple and Archax team up for tokenization with XRPL

“There is clear real-world utility in use cases like RWA tokenization for the operational efficiency, access to liquid markets and transparency inherent to crypto, and Archax has already tokenized assets such as equities, debt instruments and money market funds. Financial institutions are now understanding this and we are excited to play our part in helping them to embrace the technology by bringing their assets onto the XRPL.”

Interviews

Acuity Trading at iFX EXPO LATAM: Andrew Lane on the rise of AI and prop trading

At iFX EXPO LATAM 2024, Acuity Trading’s Andrew Lane discussed the successful rollout of their Research Terminal, the impact of AI on the trading industry, competition from AI-powered solutions, emerging market trends in Latin America, and the rise of prop trading, while addressing regulatory challenges and innovations.

blockdag

Top Crypto Highlights for Q2 2024: BlockDAG’s Astonishing 1120% Growth Compared to Solana’s Surge and Toncoin’s Market Triumph

Explore the latest highlights in cryptocurrency: Solana’s recovery, Toncoin’s record levels, and the rise of BlockDAG’s innovative technology.

Digital Assets

Ripple seeks $10 million penalty citing Terraform fine in SEC case

Ripple Labs wants to reduce the financial penalties proposed by the U.S. Securities and Exchange Commission (SEC) by leveraging recent fines imposed on Terraform Labs.

Digital Assets

Swiss regulator shuts down CoinShares’ partially-owned FlowBank

Switzerland’s financial regulator, FINMA, has closed FlowBank SA and placed it into bankruptcy due to severe breaches of capital requirements and other supervisory laws. This follows a series of enforcement actions against the bank that began in October 2021.

<